Union Assurance shows resilience amidst a challenging 2019

Union Assurance (UA) recorded a satisfactory performance during the year despite 2019 being one of the most challenging years in the recent past.

Gross Written Premiums amounted to Rs. 11.6 billion, a growth of 4 per cent over last year while Annualized New Business Premiums (ANBP) recorded a significant growth of 20 per cent year on year.

The company said in a media release that it recorded pre-tax profit of Rs. 1.7 billion in 2019, a drop compared to Rs. 2.1 billion in 2018. Recurrent post-tax profit increased by 2 per cent against the previous year’s Rs. 1,136 million.

Investment income was Rs. 4.4 billion despite a lower interest rate trajectory. Claims and benefits increased by 20 per cent to Rs. 3.5 billion compared to the previous year mainly due to an increase in maturity and surrender payouts by 18 per cent and 24 per cent respectively.

Maturity payments were made in accordance with the contractual obligations of the company and surrender payments has increased due to challenging economic conditions. The Life fund increased by 28 per cent to Rs. 5 billion over the last year in line with the growth in the life insurance portfolio and contractual obligations.

Underwriting and net acquisition costs decreased by 10 per cent to Rs. 1.9 billion with the changing composition of new and renewal business and incentive structure. Focused cost management strategies resulted in other operating expenses, administrative and selling expenses decreasing significantly by 14 per cent compared to the previous year.

Total assets of the company grew by 12 per cent to Rs. 55.2 billion with the investment portfolio which accounts for 81 per cent of assets growing by 15 per cent during the year. Total liabilities meanwhile grew by 15 per cent with the Life fund, which accounts for 87 per cent of liabilities, amounting to Rs. 35.5 billion, growing by 16 per cent during the year aligned with business growth.